Key points of investment
A pioneer in domestic chemical and electronic material application professional services: Tongyi Co., Ltd. focuses on integrated supply chain solutions provider for middle and high-end chemical and electronic materials. By providing professional technical services, it meets customer needs for material application quality, speed, cost, structural design and innovation, thereby achieving product sales. The products sold are high-end engineering plastics and electronic materials.
The business situation is steadily picking up, and R&D investment continues to increase: with technological development and social progress, demand for engineering plastics and electronic materials in various fields is increasing, and material performance requirements are gradually increasing, bringing more development opportunities to application service companies. The company's revenue rose steadily from 2016 to 2020. In 2020, the company's revenue reached 2,217 billion yuan, an increase of 24.01% over 2019 (revenue of 1,787 billion yuan).
Adapt to market trends and adjust strategic layout in a timely manner: With the commercialization of 5G and the rise of the Internet of Things, demand for electronic materials such as displays, polarizers, and chips has increased dramatically in various market segments. On March 8, 2021, the company issued a prospectus for issuing A-shares to specific targets. The fund-raising investment projects are mainly middle and high-end engineering plastics, especially the R&D, production and sales of special engineering plastics, which are widely used in mobile phones, mobile terminals, consumer electronics, smart appliances, automotive markets and 5G markets.
“New infrastructure” construction is accelerating, and the development prospects of the plate bar business are improving: based on in-depth insight into the new materials industry, timely grasp of the development direction of the industry, and in-depth understanding of the needs of terminal brands, the company expanded the industrial chain to the field of plate bar (special engineering plastic extrusion molding project) R&D and production, extending and expanding the existing business through a R&D+production+sales model, further consolidating the company's core competitiveness.
Profit forecast and investment rating: We expect the company's net profit from 2021-2023 to be 0.64/124/209 million yuan, corresponding to the 2021-2023 EPS of 0.42/0.82/1.38 yuan respectively, and the current stock price corresponding to PE is 61/31/19 times, respectively. Based on the fact that the company's board bar projects and the like are progressing in an orderly manner, the company's future performance is expected to usher in rapid development, covering it for the first time, and “buying”
ratings.
Risk warning: the risk that market demand falls short of expectations, the risk of insufficient supply of raw materials and price increases, and the risk of trade friction between China and the US falling short of expectations;